Correlation Between Koza Anadolu and Alarko Carrier

Can any of the company-specific risk be diversified away by investing in both Koza Anadolu and Alarko Carrier at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Koza Anadolu and Alarko Carrier into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koza Anadolu Metal and Alarko Carrier Sanayi, you can compare the effects of market volatilities on Koza Anadolu and Alarko Carrier and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Koza Anadolu with a short position of Alarko Carrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koza Anadolu and Alarko Carrier.

Diversification Opportunities for Koza Anadolu and Alarko Carrier

-0.19

Correlation Coefficient

Koza Anadolu  Alarko Carrier

Good diversification

The 3 months correlation between Koza and Alarko is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Koza Anadolu Metal and Alarko Carrier Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarko Carrier Sanayi and Koza Anadolu is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Koza Anadolu Metal are associated (or correlated) with Alarko Carrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarko Carrier Sanayi has no effect on the direction of Koza Anadolu i.e., Koza Anadolu and Alarko Carrier go up and down completely randomly.

Pair Corralation between Koza Anadolu and Alarko Carrier

Assuming the 90 days trading horizon Koza Anadolu is expected to generate 1.3 times less return on investment than Alarko Carrier. But when comparing it to its historical volatility, Koza Anadolu Metal is 1.13 times less risky than Alarko Carrier. It trades about 0.04 of its potential returns per unit of risk. Alarko Carrier Sanayi is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  51,761  in Alarko Carrier Sanayi on December 2, 2024 and sell it today you would earn a total of  40,489  from holding Alarko Carrier Sanayi or generate 78.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Koza Anadolu Metal  vs.  Alarko Carrier Sanayi

Koza Anadolu Metal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koza Anadolu Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Koza Anadolu is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Alarko Carrier Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alarko Carrier Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Koza Anadolu and Alarko Carrier

The main advantage of trading using opposite Koza Anadolu and Alarko Carrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koza Anadolu position performs unexpectedly, Alarko Carrier can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alarko Carrier will offset losses from the drop in Alarko Carrier's long position.

The idea behind Koza Anadolu Metal and Alarko Carrier Sanayi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.